This invention relates to a system for the coordination of the physical transport of financial instruments with the electronic processing of a deposit by the payee of the instrument into a collecting and clearing bank. The instruments are prepared for submission into the check payment system. The deposit and collection of funds represented by the financial instruments is expedited. The financial instruments are checks and other cash items.
In the prior art, the deposit and payment of a check tendered for an amount due is effected in accordance with well established traditional procedures. The drawer (the check writer) establishes a checking account containing funds with a bank. A check is written against the drawer's account in favor of the payee. The payee indorses the check and deposits the check in the payee's account at the bank of first deposit for collection. That bank handling the payee's account and the deposited check presents the check through the check payment system to the drawer's bank for payment. This bank in turn debits funds from the drawer's account, and typically archives the check or a copy of the check and/or returns the physical check to the payor, and the cycle is thus completed. In the sequence of check handling, a check transferee remits, or is responsible for, the funds represented by the check to its transferor if the check is honored by the drawee.
The multiple steps in the process and the physical handling of checks involve a period of "float" time for the funds represented by the check. Recent banking regulations have shortened the traditionally permitted times for check processing and collection.
The receipt of 10,000 to 1,000,000 or more checks drawn on numerous different banks is not unusual for many large businesses such as credit card issuers, utilities, mail order processors, and other large commercial entities. In situations where large numbers of checks are involved, the handling of individual checks and effecting their posting, deposit and clearing is a complex multiple step process.
Thus there exists a need for a system whereby the conventional deposit and collection of funds represented by a check or other financial instrument may be simplified and expedited, particularly for large business institutions such as public utilities, mail order processors, and the like which receive large numbers of checks on a regular basis.
It is an object of this invention to provide such an expedited check deposit and collection mechanism and to reduce the amount, complexities and requirements for physical transport of financial instruments. It is a further object to eliminate duplicative data capture steps and multiple handling involved in the payee's and the bank of first deposit's handling of the same instrument.